Municipal WiFi Costs Outweigh Benefits

TheSync writes "JupiterResearch claims that muni WiFi costs outweigh benefits. It can cost up to $150,000 per square mile over five years, which may not even provide each user a benefit of $25 a month. They suggest that such projects only be taken on as public-private partnerships."

Comments

Minor Details

[Oculus Habent]

First, the article says the average cost is $150,000, not up to $150k.

Second, it says an assumed $25/month benefit, not that it's not even $25/month. Also, Internet access costs me $40/month, so...

Third, it says the first five years, which includes all manner of infrastructure creation. Even a major network upgrade would likely cost less later on, because you don't have to find locations, put up towers, etc. I'd like to see the per year estimates, but I'm not subscribed to Jupiter's service.

If your town/city is going through the work and effort to build this manner of network, hopefully someone is going to notify your citizens and try to get them onboard. By Jupiter's reckoning, it takes an average 100 users per square mile to cover the costs. Now, if your city/town put any real effort into this project, you'd probably let people know that free Internet access is a $40 network card away. Get local computer stores to stock up on the cards and ask them to chip in on an ad campaign. They can offer a flat-rate installation service (with caveats for running into problems, etc)

Re:Minor Details

[BadDoggie]

Additionally, JupiterResearch make their money by selling their reports and their consulting services to other businesses. Their opinions are hardly unbiased, as the selective "study" of only the first five years of running the network shows.

woof.

Re:Minor Details

[dnoyeb]

Corporate types have been successful in convencing the average person that they run stuff better than Government. So people keep pushing privitization to their own detriment. (fire the city workers, then pay for their welfare)

They forget that government pays more for each worker, corporations just take all the profits to the people on the top. When people see the guy on the bottom makin money they claim he don't deserve it and its waste. But when the guy on the top does, they don't complain.

Its whack. Besides, every new business should expect to loose money its first several years...

Well, Wifi isn't cheap enough

[Matey-O]

Until you get a fabric network that covers multiple square miles per basestation (a la WiMAX) You'll not see a municipal implementation over a metro area.

Sure there are exceptions (where town.size approaches zero) or (starbuck.count approaches infinity) but this is just the economics catching up with the technology.

If you've got a connection at home, and you've got a connection on the Bus, and you've got a connection via your cellphone, and yuo've got a connection via your coffee shop, why does a city have to be 100% covered by 802.11a/b/g? GPRS/EDGE/3g/future can (and initially will) pick up the slack.

Hark to my voice of warning!

[kahei]

Hear me before it is too late! SHUN the evil of the Three P's, Public Private Partnership! Turn ye either to the left, to publically funded projects, or to the right, to the blessed land of private enterprise -- but walk not the middle path, the path of the Three P's!

Once, this land of England was fair and pleasant, with mighty Industry and caring Government working hand in hand! Then came the Three P's! They promised us cost savings and social responsibility, but they delivered nothing -- nothing save gigantic invoices and permanent damage to the environmental and social fabric of the nation!

Turn aside, oh turn, I beg you, America, from this path of wickedness! For the evil of Bloated Government Inefficiency is in them, and the sin of Greedy Private Contractors they likewise have! And the private half shall spend, yea spend and spend, and the public half will know not nor care where the money has gone!

Repent therefore, repent before they do unto you as they have unto Europe!

My words have the semblance of jest, but the danger is deadly serious.

Contract research

[HangingChad]

I don't know about anyone else but I'm getting skeptical about anything I read from Jupiter, Gartner or any of the big research firms. It's usually being paid for by someone with an agenda and, no surprise, the research tends to support the conclusions the customer wants. After a while you just stop paying attention to them. They've sold their credibility.

The Politics of this Study

[braddock]

This study needs to be looked at very skeptically, because there is a lot of money right now trying to discourage municipal wifi systems. Why? Because any new legislation being pushed by the telcom companies to ban municipal wifi as unfair competition would have to grandfather in any existing municipal wifi systems and allow them to continue to operate and even expand.

Many of the Wifi activists (Boston Area Wireles for example) are trying to convince local governments to at least establish a single note public Wifi system just so that they can continue to operate if the telecom industry manages to outlaw public networks.

It's pretty obvious which side of this battle has the money and motive to pay for "independent" research.

-braddock

To what end?

[Eric S. Smith]

JupiterResearch claims that muni WiFi costs outweigh benefits. ... They suggest that such projects only be taken on as public-private partnerships.

I love this reasoning. "It's too expensive to be worthwhile, so please pay a private firm to do it."

Math doesn't add up.

[MarvinMouse]

150,000 per square mile over 5 years.

so that works out to 150,000/5 years/12 months = 2500 per square mile per month.

Which means that if you have 100 users in a square mile, which is far more than reasonable, you will be getting equivalent costs to benefits.

Let's say I misunderstood it, and it was 150,000 per square mile per year over 5 years. So then it would be 150,000/12 = 12500 ~ 500 users would be needed, again, really small number for a large city.

Finally, let's say I'm completely wrong and that 150,000 is per month. Then it would require 6000 users for there to be benefit. Which in a city like New York or San Francisco, is far more than reasonable.

Unless, of course, Jupiter is stating something way off, their math makes no sense at all. The cost they are giving is way more than reasonable for the benefits to the general population.

What happened to "community good" as cause?

[coyote-san]

Why does everyone try to reduce every question to money alone? Oh yeah, they're selling stuff.

Governments should strive to provide services for as little cost as possible, but that doesn't mean that it should fail to provide a service at all if just because somebody declares it to be not cost-effective.

Guess what, public libraries are not cost-effective.

Public parks are not cost-effective.

I'm sure others can add their own examples. Cities provide these service because it benefits the residents and makes the city more attractive to others. E.g., it might encourage a company to locate new offices in this city instead of another to keep the employees happy, and unlike the usual "development incentives" these investments actually benefit the people, not a few executives.

Should cities provide wifi - even free wifi - in downtown and business areas? I think it should - because the public good (e.g., allowing people to check their email from anywhere in the area) outweighs the cost. If the city really, really needs to offset the cost it could impose a nominal head count on the employees in the area, and by "nominal" I mean $2/month/full-time equivalence person. It won't cover the entire cost but it's a symbolic gesture.